Applicant Information
Ethnicity
The Regulation C amendments require the
collection of data on ethnicity as a separate data field
from race. This will conform data collection under the
regulation with standards established by the U.S. Office
of Management and Budget (OMB) in 1997 and used in the
2000 Census. Conforming the data collected under Regulation
C to census data will provide assistance in identifying
possible discriminatory lending practices.
Beginning Jan. 1, 2004, lenders must collect information
regarding whether an applicant is Hispanic or Latino,
or does not fall within this category, regardless of
whether the application is taken in person, by mail,
by telephone or over the Internet.
OMB DEFINITION
The OMB defines Hispanic or Latino as a person of Cuban,
Mexican, Puerto Rican, South or Central American or
of other Spanish culture or origin, regardless of race.
The term “Spanish origin” can be used in
addition to “Hispanic or Latino.”
REPORTING ETHNICITY INFORMATION
Loan applicants must be provided the standard
disclosure
about the reasons for collection of data on ethnicity.
The disclosure indicates that requesting information
about ethnicity, race and sex is mandated by the federal
government to assist in the enforcement of fair-lending
laws. Providing the information is voluntary; if the
applicant does not provide the information and the
application is taken in person, the lender is required
to note the
data on the basis of visual observation or surname.
In addition, applicants must be advised that lenders
are prohibited from discriminating on the basis of
the information provided, or on the basis of the applicant
choosing to provide or not provide the information.
This information must be stated orally by the lender
if the application is taken by telephone or in person
and in written form if the application is by mail
or
over the Internet.
Lenders may list questions regarding the ethnicity,
race and sex of the applicant on the loan application
form or on a separate form that refers to the application.
Appendix B of Regulation C provides a sample form that
may be used for data collection.
REPORTING ETHNICITY ON THE HMDA-LAR
The reporting requirements add an additional data field
and codes under the “ethnicity” field. For
reporting purposes, enter one of the following five
codes for this field:
Code 1 – “Hispanic or Latino.”
Use this code for applications where the
borrower indicates this is his or her ethnicity. Also
use this code if the information is not provided when
the application is taken in person and you note on
the basis of visual observation or surname that the
applicant is Hispanic or Latino.
Code 2 – “Not Hispanic or Latino.”
Use this code for applications where the borrower
indicates his or her ethnicity does not fall into
this category. Also use this code if the information
is not provided when the application is taken in person
and you note on the basis of visual observation or
surname that the applicant is not Hispanic or Latino.
Code 3 – “Information not provided
by applicant in mail, Internet or telephone application.”
Use this code if the applicant does not provide his/her
ethnicity in an application taken by mail or telephone
or over the Internet.
Code 4 – “Not applicable.”
Use this code only when the applicant or co-applicant
is not a natural person or when applicant or co-applicant
information is unavailable because the loan has been
purchased by your institution.
Code 5 – “No co-applicant.”
Use this code if there are no co-applicants or co-borrowers
in the co-applicant column.
TRANSITION RULE
For applications received in 2003 on which final action
is taken on or after Jan. 1, 2004, lenders must collect
data on race or national origin using the categories
in effect in 2003 and must convert the data to the ethnicity
and race codes in effect in 2004 for reporting purposes.
Further detailed information on this topic, including
a conversion guide, is located under Transition
Rules.
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